**Contract Authority**

**Substituted And Liquidated by Offsetting Collections**

This scenario displays transactions for contract authority substituted by offsetting collections.  Under certain circumstances, OMB allows contract authority to be substituted by unfilled customer orders before the orders are earned and collected.  

In this scenario, an agency has new contract authority.  Contract authority is substituted as undelivered orders are accepted.  Contract authority is then liquidated as the reimbursements are earned and collected.   Any balance of obligated contract authority not offset by orders or by receivables****is carried forward to the next year.   The contract authority carried forward will be substituted and eventually liquidated by new offsetting collections.  

The following accounts will be used in this scenario.  Refer to the U.S. Government Standard General Ledger (USSGL) for accounts, account descriptions, accounting transactions and crosswalks to reports (https://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm).  In addition, each transaction in the scenario is coded with transaction numbers that are identified in Section III of the USSGL. 

**STANDARD GENERAL LEDGER ACCOUNTS ILLUSTRATED**

## Adjusting Entries

**PRE-CLOSING ADJUSTED TRIAL BALANCE**

**CLOSING ENTRIES**

**POST-CLOSING ADJUSTED TRIAL BALANCE**

**USSGL-2108  (Record type 7 – Contract authority .941)               Main  C.A.**

Col. 2  Pre-closing balance- Treasury Supplied                     25

Col. 3  New contract authority  (4131E)          ****600

Col. 4  Appropriations to Liquidate                                                                

Col. 5  Write-offs, Restorations or Adjustments (4132E + 4135E**)**25****550                 

Col. 6  Balance of Unfunded Contract Authority  (Col. 2 + Col 3- Col. 4)      50

Col. 8  Unfilled Customer Orders (4221E)150 

Col. 9  Undelivered Orders and Contracts (4801E) 100

Col. 10 Accounts Payable and Other Liabilities (4901E)125        

SF-133 and Statement of Budgetary Resources

**Budgetary Resources**

1C.   Current year Contract Authority  (4131E) 600

3A.   Spending Authority from Offsetting Collections

         1.  Collected  (4252E) 400

3B.  Change in Unfilled Customer Orders                                                                     

         2. Without Advances   (4221E) 150                   

6D.  Other Authority Withdrawn (4132E + 4135E)                                                 (550)

7.      Total Budgetary Resources                                                                                 600

# Status of Budgetary Resources

8.      Obligations Incurred (4801E-B+4901E-B + 4902E) 600

9.      Unobligated Balance                                                                                                  0

10.    Unobligated Balance Not Available (4450E)     0 

11.    Total Status of Budgetary Resources                                                                    600

# Relation of Obligations to Outlays

12.  Obligated Balance, net as of October 1              0

14A.  Accounts Receivable                                                                       (0)

14B.  Unfilled Customer orders without advance  (4221E)                                            (150)          

14C.  Undelivered orders  (4801E) 100

14D. Accounts Payable  (4901E) 125

15.   Outlays

A.  Disbursements (4902E) 375

B.  Collections (4252E)         ****(400)

17. Net Outlays                                                                                                               (25)

# Statement of Net Cost

1.     Intragovernmental Gross Costs (6100E)                                      0

2.     Less: Intragovernmental Earned Revenues  (5200E)              (400)

3.     Intragovernmental Net Costs                                                             (400) 

4.     Gross Costs with the Public (6100E,)                                               500

5.     Less: Earned Revenues From the Public                                                     0

6.     Net Costs with the Public                                                                             500

7.     Total Net Costs                                                                                         100

10.   Net Cost of Operations                                                                          100 

# Statement of Changes in Net Position

Cumulative Results of Operations

1.    Beginning Balance                                                                           0

17.  Net Cost of Operations                                                             100

18   Net Position End                                                                                (100)

# Statement of Financing

1.    Obligations Incurred (4801E-B+4901E-B, 4902E)                                             600

2.     Less: Spending Authority from Offsetting Collections and Recoveries

           (4252E+4222E-B**+**4221E-B)                                    (550)

3..    Total obligations Net of Offsetting Collections and Recoveries                          50

11.   Total Resources Used to Finance Activities (calc)                                               50

12.   Total resources Used to Fund Item Not Part of the Net Cost of Operations 

            (4801E-B+4222E-B**+**4221E-B)                                                  50

30     Net Cost of Operations                                                                                      100

# BUDGET PROGRAM AND FINANCING SCHEDULE – ACTUALS

#                                                        For the year ended September 30, 20xx                                          

# OBLIGATIONS BY PROGRAM ACTIVITY

# 1000    Total New Obligations (4801E, 4901E, 4902E)  600

# BUDGETARY RESOURCES AVAILABLE FOR OBLIGATION:

# 2140    Unobligated balance, carried fwd, SOY      0

# 2200    New Budget Authority (gross) (sum of lines 4000 to 6962)  600

# 2395    Total New Obligations (Same as line 1000, opposite sign) (600)

# 2440    Unobligated Balance, carried forward, EOY         0

# NEW BUDGET AUTHORITY (GROSS), DETAIL:

#         Mandatory:

# 6610    Contract Authority (4131E)  600

#        Discretionary:

# 6800     Offsetting Collections (cash) (+) (4252E) 400

# 6810     Change in uncollected customer payments from Federal Sources (4221E) 150

# 6890     Spending authority from offsetting collections (total discretionary) 550 

#        Mandatory:

# 6949     Portion applied to liquidate contract authority (4132E)(4135E)(550)

# 7000     Total New Budget Authority (gross) (sum 4000...6990) 600

# CHANGE IN OBLIGATED BALANCES:

# 7240    Obligated balance, SOY     0

# 7310    Total New Obligations (line 1000) 600

# 7320    Total Outlays (gross)  (4902E)(375)

# 7400    Change in uncollected customer payments for Federal Sources (unexpired) (150)

# 7440    Obligated balance (EOY) (4801+4901E-4221E)   75 

# OUTLAYS (GROSS), DETAIL:

# 8697    Outlays from new mandatory authority (4902E)  375 

# OFFSETS:

#         Against gross budget authority and outlays:

# 8800    Federal Sources (4252E)(400)

#         Against gross budget authority only:

# 8895    Change in uncollected payments from Federal sources (calc 6810+6910)(150)

# NEW BUDGET AUTHORITY AND OUTLAYS:

# 8900    Net Budget Auth (lines 2200 – (8800 thru 8896)  50

# 9000    Outlays (net) (lines 8690...8698 minus 8800...8845) (25)

Page 1 of 8Released:  December, 2004